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					                          GENERAL DEPARTMENT RULES                             42.2.503

                                     Subchapter 5

                 Partial Payments, Penalties, Interest, and Collection

        42.2.501 APPLICATION OF PARTIAL PAYMENTS (1) Partial payments
that are received by the department for payment of a tax liability and a collection
service fee, if any, must be applied proportionately between the tax liability and the
collection service fee. Payment of the tax liability is applied in the order of tax,
penalty, and then interest.
        (2) Partial payments for a customer's tax liability shall be applied as directed
by the customer as to account type, period, or order to apply.
        (3) If customer direction is not provided, the payment will be applied in full to
the oldest period first in the following order:
        (a) first to tax (dollar for dollar until satisfied);
        (b) then to penalty (if due); and
        (c) then to interest (if due).
        (4) Payments not directed by the customer will be applied pro rata among
the accounts being collected by the department. For example, if 30% of the total
debt is coal severance tax, 40% is withholding, and 30% is income tax, and a partial
payment is received, application of the payment will be applied pro rata according to
the schedule shown in (1) until all debt is satisfied. (History: 2-4-201, 15-1-201, 15-
30-305, 15-31-501, 15-35-122, 15-53-155, MCA; IMP, 2-4-201, 15-1-206, 15-1-216,
15-30-304, 15-30-321, 15-30-323, 15-31-111, 15-31-502, 15-31-506, 15-31-510, 15-
31-522, 15-31-543, 15-35-105, 15-35-121, 15-37-108, 15-38-107, 15-38-110, 15-53-
145, 15-59-106, MCA; NEW, 1988 MAR p. 882, Eff. 5/13/88; AMD, 1988 MAR p.
2403, Eff. 11/11/88; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2002 MAR p.
1998, Eff. 7/26/02; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2008 MAR p. 340,
Eff. 2/15/08.)

       Rule 42.2.502 reserved

       42.2.503 JEOPARDY ASSESSMENT AND EMERGENCY EXECUTION
       (1) If the department finds the assessment or collection of a deficiency will
be jeopardized by delay and a deficiency notice has not been issued, the deficiency,
penalty, and accrued interest become immediately due and payable on the date the
department mails the taxpayer a written notice:
       (a) of its finding that assessment or collection of the deficiency will be
jeopardized by delay and its basis for making the finding;
       (b) of the amount of deficiency, penalty and accrued interest (the statement
of account);
       (c) that immediate payment of the deficiency, penalty and interest is
demanded;
       (d) that the department may immediately commence collection proceedings,
including issuing a Warrant for Distraint;




ADMINISTRATIVE RULES OF MONTANA                          3/31/08                 42-145
42.2.503                    DEPARTMENT OF REVENUE

       (e) that if the taxpayer does not file a written objection to the amount of the
statement of account or a Request for Informal Review Form (APLS101F) with the
department within 30 days of the date of the notice, the assessment becomes final
and may not be appealed to the State Tax Appeal Board; and
       (f) that while filing the objection or request as provided in (1)(e) will not stop
or delay collection proceedings, including issuing a Warrant for Distraint, if the
taxpayer files the objection or request and it is subsequently determined in the
department dispute resolution proceedings or on subsequent appeal that the
amount of tax collected is in excess of the amount due, the amount of the
overpayment will be credited against any income tax, penalty, or interest then due
from the taxpayer and the balance of the excess refunded to the taxpayer as
provided in 15-30-149 and 15-31-531, MCA.
       (2) If the department finds the collection of a deficiency, for which a Notice of
Deficiency has been mailed, will be jeopardized by delay and the time for filing a
written objection to the amount of the Statement of Account or a Request for
Informal Review form (APLS101F) with the department as provided in ARM
42.2.510 has not yet expired, the deficiency, penalty, and accrued interest become
immediately due and payable on the date the department mails the taxpayer a
written notice:
       (a) of its finding that collection of the deficiency will be jeopardized by delay
and its basis for making the finding;
       (b) that immediate payment of the deficiency, penalty and interest is
demanded;
       (c) that the department may immediately commence collection proceedings,
including issuing a Warrant for Distraint; and
       (d) that if it is subsequently determined in the department dispute resolution
proceedings or on subsequent appeal that the amount of tax collected is in excess
of the amount due, the amount of the overpayment will be credited against any
income tax, penalty, or interest then due from the taxpayer and the balance of the
excess refunded to the taxpayer as provided in 15-30-149 and 15-31-531, MCA.
       (3) If the department finds the collection of a tax, including penalty and
interest, will be jeopardized by delaying the issuance of a Warrant for Distraint until
the notice provided in 15-1-702, MCA, has been given and 30 days have passed,
the department will issue the Warrant for Distraint without giving the taxpayer prior
notice. On the date a Warrant for Distraint is issued, the department will mail the
taxpayer written notice that warrants have been issued.
       (4) If the department has reason to believe that collection of the amount of
any tax withheld is in jeopardy, the department will issue the Warrant for Distraint
without giving the employer prior notice. On the date a Warrant for Distraint is
issued, the department will mail the employer written notice that warrants have been
issued. (History: 15-30-305, MCA; IMP, 15-30-204, 15-30-312, 15-31-531, MCA;
NEW, Eff. 12/31/72; AMD, 1982 MAR p. 14, Eff. 1/15/82; AMD and TRANS, from
42.16.103, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2008 MAR p. 340, Eff. 2/15/08.)




42-146               3/31/08                ADMINISTRATIVE RULES OF MONTANA
                         GENERAL DEPARTMENT RULES                             42.2.510

       42.2.504 PENALTIES (1) Applicable late filing penalties and late pay
penalties must be calculated as set forth in 15-1-216, MCA.
       (2) The penalty for purposely failing to file a return or to pay the tax by the
due date is set forth in 15-1-216, MCA.
       (3) A taxpayer who files, renders, or signs a false or fraudulent return or
statement, or who supplies the department with false or fraudulent information, is
subject to the additional civil and criminal penalties described in 15-30-321, MCA.
(History: 15-30-305, MCA; IMP, 15-1-216, 15-30-321, 15-30-323, MCA; Eff.
12/31/72; AMD, Eff. 7/5/75; NEW, Eff. 7/5/75; AMD, 1982 MAR p. 14, Eff. 1/15/82;
AMD, 1984 MAR p. 2031, Eff. 12/28/84; AMD and TRANS, from 42.16.105, 2004
MAR p. 3153, Eff. 12/17/04; AMD, 2006 MAR p. 85, Eff. 1/13/06.)

        42.2.505 INTEREST ON UNPAID TAX (1) Interest on unpaid tax must be
calculated as set forth in 15-1-216, MCA.
        (2) In the case where there is unpaid tax for a year that is reduced by the
carryback of a subsequent year's net operating loss, interest on the unpaid tax
accrues to the later of:
        (a) the due date of the loss year return; or
        (b) the date the loss year return is actually filed. This limited interest
calculation applies only to the unpaid tax offset by the net operating loss carryback.
(History: 15-30-305, MCA; IMP, 15-30-142, MCA; Eff. 12/31/72; AMD, 1982 MAR p.
14, Eff. 1/15/82; AMD, 1992 MAR p. 2557, Eff. 11/26/92; AMD, 1994 MAR p. 2352,
Eff. 8/12/94; AMD and TRANS, from 42.16.104, 2004 MAR p. 3153, Eff. 12/17/04;
AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2008 MAR p. 340, Eff. 2/15/08.)

       Rules 42.2.506 through 42.2.509 reserved

        42.2.510 REVIEW OF STATEMENT OF ACCOUNT NOTICES (1) This rule
applies to all department actions where a statement of account (SOA) or deficiency
assessment, as defined in ARM 42.2.304, is issued. A statement of account does
not include centrally assessed appraisal reports and centrally assessed assessment
notices which are covered by ARM 42.2.511.
        (2) The department will provide notification to the customer by mailing the
SOA as defined in ARM 42.2.613, to the customer as prescribed in 15-1-211, MCA.
Information provided on the SOA shall advise the customer of the requirement to file
a Request for Informal Review Form APLS101F or a written objection to the SOA
with the department within 30 days from the date of the SOA; and that failure to file
a written objection within the 30 days shall be deemed an admission that the
customer agrees the debt stated in the SOA is due and owing.
        (a) If the customer agrees with the SOA, the matter is resolved upon
compliance with, or acceptance of, the terms set forth in the SOA.
        (b) If the customer does not pay or respond to the SOA as required in (2), a
letter will be sent to the customer requesting payment within 30 days of the date of
the letter or a Warrant for Distraint may be issued pursuant to 15-1-702, MCA.
        (c) If payment to the bill is received, the matter is resolved.
        (d) If payment to the bill is not received, the matter is forwarded to the
department's Accounts Receivable and Collection (ARC) process for handling.


ADMINISTRATIVE RULES OF MONTANA                         3/31/08                 42-147
42.2.510                    DEPARTMENT OF REVENUE

        (3) The customer must submit, to the department, an objection to the SOA
within 30 days of the date on the SOA. If the objection is sent by the U.S. Postal
Service or by any other generally accepted delivery service, the objection must be
postmarked within 30 days of the date of the SOA. If it is sent by electronic mail, it
must be sent within 30 days of the date of the SOA. Failure to respond within the 30
days shall be deemed an admission that the customer concurs that they owe the
debt stated in the SOA.
        (a) Objections may be submitted using the APLS101F or by a detailed letter
stating the issues and amount of tax disputed.
        (b) Electronic objections will be accepted. The e-mail address,
soaobjections@mt.gov is provided on the SOA in the appeal rights section of the
SOA.
        (4) A mutual extension may be granted if both parties agree.
        (5) The department shall review the objection and determine whether the
department agrees or disagrees with the customer's objections. The department
shall mail written notice to the customer advising the customer of the department's
determination within 30 days after receipt of the objection.
        (a) If the department concurs with the customer, the matter is resolved by
withdrawing or revising the SOA.
        (b) If the department disagrees with the customer, it shall explain the
reasons for the disagreement, notify the customer of the dispute resolution
procedures and provide a copy of Notice of Referral Form (APLS102F). The
department shall also notify the customer that the customer must submit a
APLS102F or detailed letter to the department within 15 days of the date on the
Notice of Determination from the department, and that the customer will forfeit the
right to a hearing if the customer fails to submit the APLS102F or detailed letter
within the 15-day period.
        (6) Appeals shall be submitted to the Office of Dispute Resolution if the
customer decides to appeal the department decision, as required in 15-1-211, MCA.
This may be done by completing the APLS102F, or by providing a detailed letter and
submitting either document to the department within 15 days of the date of the
Notice of Determination from the department. Appeals should be sent to the
Department of Revenue, Office of Dispute Resolution, P.O. Box 7701, Helena,
Montana 59604.
        (a) Failure to file an appeal by the customer within 15 days of the date of the
Notice of Determination by the department shall be deemed an admission that the
customer concurs that the debt stated in the SOA is due and owing.
        (b) If the customer pays the bill, the matter is resolved.
        (c) If the customer does not pay the bill, the matter will be referred to ARC for
collection.




42-148               3/31/08               ADMINISTRATIVE RULES OF MONTANA
                         GENERAL DEPARTMENT RULES                              42.2.511

       (7) Once the matter is submitted to ODR, ARM 42.2.613 through 42.2.621
apply. The department has 180 calendar days from the referral date to resolve the
matter.
       (8) The parties can agree to settle the dispute at any point during the
process.
       (9) If the department fails to comply with the deadlines in this rule, the
customer may immediately refer the matter to the Office of Dispute Resolution.
(History: 15-1-201, 15-1-211, 15-1-701, 15-31-501, 15-35-122, 15-36-322, MCA;
IMP, 15-1-211, 15-1-406, 15-8-601, 15-23-102, 15-23-107, 15-30-142, 15-31-503,
15-37-109, 15-37-114, 15-38-108, 15-39-110, MCA; NEW, 2002 MAR p. 3048, Eff.
11/1/02; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2008 MAR p. 340, Eff. 2/15/08.)

        42.2.511 REVIEW OF CENTRALLY ASSESSED PROPERTY APPRAISALS
        (1) This rule applies to all centrally assessed property tax appraisals issued
by the department.
        (2) Appraisal reports will be mailed to the customer as provided in ARM
42.22.115. The appraisal report shall advise the customer of the requirement to file
a Request for Informal Review Form APLS101F or a written objection to the
appraisal report within 15 days of the date of the appraisal report; and that failure to
file a written objection within the 15 days shall be deemed an admission that the
customer agrees with the appraisal is correct and final. If the customer agrees with
the appraisal, no response is required and the department will advise the local
department field office and the customer by issuing an assessment notice on or
before July 1 of the year of assessment that the appraisal is final.
        (3) Objections to appraisal report shall be sent to the department within 15
days of the date on the appraisal report. If the objection is sent by the U.S. Postal
Service or by any other generally accepted delivery service, the objection must be
postmarked within 15 days of the date of the appraisal report. If it is sent by
electronic mail, it must be sent within 15 days of the date of the appraisal report.
Failure to respond within the 15 days shall be deemed an admission that the
customer concurs with the appraisal as stated in the appraisal report.
        (a) Objections may be submitted using the APLS102F or by a detailed letter.
        (b) Electronic objections will be accepted. The e-mail address,
soaobjection.mt.gov, is provided on the appraisal report in the appeal rights section.
        (4) Mutual extensions may be granted if both parties agree. The parties may
extend the time periods in this rule after the initial objection has been filed by
completing an extension form or by detailed letter.




ADMINISTRATIVE RULES OF MONTANA                         3/31/08                  42-149
42.2.511                   DEPARTMENT OF REVENUE

       (5) The department shall review the objection and determine whether the
department agrees or disagrees with the customer's objections. The department
shall mail written notice to the customer advising the customer of the department's
determination within 15 days after receipt of the objection.
       (a) If the department concurs with the customer, the matter is resolved by
revising the appraisal report and issuing a final assessment notice.
       (b) If the department disagrees with the customer, it shall explain the
reasons for the disagreement by issuing a revised appraisal report, notify the
customer of the dispute resolution procedures and provide a copy of Form
APLS101F. The department shall also notify the customer that the customer must
submit Form APLS101F or detailed letter to the department within 15 days of the
date on the revised appraisal report, and that the customer will forfeit the right to a
hearing if the customer fails to submit the Form APLS101F or detailed letter within
the 15-day period. Appeals should be sent to the Department of Revenue, Office of
Dispute Resolution, P.O. Box 7701, Helena, Montana 59604.
       (6) If the customer decides to appeal the department's decision, the
customer shall:
       (a) within 15 days of the date of the revised appraisal report forward the
matter to the Office of Dispute Resolution (ODR), as required in 15-1-211, MCA, by
completing the Form APLS102F, or by providing a detailed letter and submitting
either document to the department; or
       (b) upon mutual agreement of the parties file an appeal with the State Tax
Appeal Board.
       (7) If the matter is submitted to ODR, ARM 42.2.613 through 42.2.621 apply.
The department has 180 calendar days from the referral date to resolve the matter.
       (8) The parties can agree to settle the dispute at any point during the
process.
       (9) If the department fails to comply with the deadlines in this rule, the
customer may immediately refer the matter to ODR.
       (10) The following flow chart shows the process beginning with the appraisal
report being provided to the customer: (History: 15-1-201, 15-1-211, 15-23-108,
MCA; IMP, 15-1-211, 15-1-406, 15-8-601, 15-23-102, 15-23-107, MCA; NEW, 2002
MAR p. 3048, Eff. 11/1/02; AMD, 2006 MAR p. 85, Eff. 1/13/06.)

       Rules 42.2.512 through 42.2.519 reserved




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42-150               3/31/08           ADMINISTRATIVE RULES OF MONTANA
                         GENERAL DEPARTMENT RULES                             42.2.520

        42.2.520 COLLECTION OF DELINQUENT TAXES OR OTHER FUNDS
THROUGH OFFSET PROCEDURES (1) In order to collect delinquent taxes after
the time for appeal has expired, the department may direct the offset of tax refunds
or other funds due the taxpayer from the state except wages subject to the
provisions of 25-13-614, MCA, and retirement benefits that are exempt from
execution.
        (2) Contract proceeds subject to offset may include wages due the taxpayer.
 Taxpayers may exclude wages from offset on contract proceeds by submitting a
claim to the department within 30 days of notification of the offset. The claim must
set forth the amount of wages and include documentation to support the claimed
wage exclusion. Should the department dispute the claim, the claim and
documentation shall be considered a request for hearing.
        (3) Upon determination by the department of a tax refund or other funds
owed by the state to a delinquent taxpayer, the department may direct the offset of
such funds by serving notification of the offset to the taxpayer.
        (a) The department shall provide notice of the right to request a hearing
pursuant to the Montana Administrative Procedure Act on the matter of the offset
action or the department's intent to file a claim on behalf of a taxpayer.
        (b) All tax refunds or other funds subject to offset by the department shall be
held pending either the expiration of the 30-day notification period, or the resolution
of the taxpayer's hearing, if requested.
        (c) The provisions of (3) and (3)(a) also apply to claims for tax refunds
submitted on behalf of delinquent taxpayers by the department.
        (4) The department may file a claim for state funds on behalf of the
delinquent taxpayer if a claim is required before the funds are available for offset.
        (5) Claims for tax refunds or other funds which are submitted by the
department are based upon a subsequent intent to offset on those funds. Should a
hearing be requested by the taxpayer, the issues of such hearing shall be based
upon both the claim submitted by the department and the intended offset.
        (6) The department may internally issue such offsets or claims upon tax
refunds or other funds administered by the department in accordance with the
above provisions.
        (7) Tax refunds and other funds seized by levy based upon a filed Warrant
for Distraint are not subject to the above provisions. (History: 15-1-201, 15-1-217,
15-30-305, 17-4-110 MCA; IMP, 15-1-211, 15-1-216, 15-30-310, 17-4-103, 17-4-
105, 17-4-106, 17-4-111, MCA; NEW, 1985 MAR p. 2016, Eff. 12/27/85; AMD and
TRANS, from 42.16.106, 2004 MAR p. 3153, Eff. 12/17/04.)




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ADMINISTRATIVE RULES OF MONTANA            3/31/06                              42-165